Frequent mistakes founders make and how to avoid them

Hey there 👋 - Rahil here!

Happy Saturday to the product, engineering and startup folks reading this newsletter.

In today's edition, we will discuss the common mistakes early-stage startup founders make and how they can be avoided.

Estimated Reading Time = 4 minutes and 30 seconds

Building tech stack from scratch

Non-tech founders are usually led to believe that building from scratch will enable a better product and unique IP over time. This certainly is true in some cases but not in others. Building something from scratch would certainly cost more resources.

Research to see if there is readily available open-source technology/product that solves problems in your chosen industry.

Can you use it, or refactor it and launch your first MVP with it?

This does not have to be perfect, since you are still finding your product-market fit by validating the assumption.

We built Thriftify two-sided marketplace MVP in just 6 weeks, put it in front of our target customer and tested our product-market fit hypotheses. This approach gave us a clear advantage where our competitors were building products from scratch - building user authentications, security protocols and other complex features- whereas these standard features came out of the box for us and helped us to keep our focus on our product.

No matter how good your engineering skills are, resist reinventing the wheel. You have very limited resources to validate and build your idea. Use them wisely. Build unique Intellectual Property (IP) in your product, not your technology.

Deprioritising product over-engineering

Over-engineering can be fatal for your product and for your entire early-stage business.

Engineers and coders love to make problems more complex and attempt to solve problems which they don't have. Coming from an engineering background myself, I have also made this mistake and learnt some brutal lessons.

A basic product development mindset can go a long way to identifying the right problem that requires a disruptive solution.

Launching into new markets before nailing down the product-market-fit

Product-market fit is a very elusive term, hard to measure and might vary from business to business. A universal definition might look like this

After achieving success in the local market, founders are eager to tap into neighbour markets and do so with little or no preparation. Winning the local market does not mean that your product is ready for global domination. Every market is different and poses different regulations, customers’ underserved needs and expectations. All of this must be understood, and products offering must be adapted before launching into 2nd, 3rd and future markets.

When launching in the UK, we tried to launch with the same products that helped us to win the local Irish market. However, soon we hit the wall, where we made little progress and failed to onboard a single major customer.

We went back to the whiteboard and identified and analysed our top competitors’ products, two large target customers, and their underserved needs in the UK. This helped us to adapt our product as per the market needs and enabled us to win the first major enterprise customer.

Overloading MVP with ‘nice to haves’ features

Building digital products like web apps are far larger proposition than founders anticipate, even if you really try to focus on the critical and most valuable feature set.

The founders’ grand vision of the future usually becomes a bottleneck when extracting out the MVP with the most critical feature required to validate the hypothesis.

Simple MVP is overloaded with too many features that burn out resources very quickly, distract from the One niche and fail to capture the required validation.

In the early days of any startup journey, avoid product and engineering ‘rabbit-hole’ at all costs.

Keep laser focussed on a single feature, analyse, develop, deploy, review and iterate. Minimise the chaos and increase the chances of success.

Not considering offshore teams

When cash flow is non-existent or very little, Being very frugal in the early days will increase your chances of success.

In technology start-ups, the biggest expense is paying for engineering and product development. Given the great quality of talent available in emerging economies and remote tools (slack, zoom and others) to collaborate with them, hiring offshore is the best way to save money early on.

When building out the Thriftify marketplace products, I hired talented product owners and engineers in Pakistan for $40/hr where the same could have cost us over $100/hr in the EU.

I believe this decision was one the most important ones that really helped our products to scale rapidly with minimum funding required. Hiring global talent also extended our runaway and enabled us to raise funds at less aggressive terms.

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